{"id":47516,"date":"2025-11-25T16:02:35","date_gmt":"2025-11-25T16:02:35","guid":{"rendered":"https:\/\/www.trintech.com\/?p=47516"},"modified":"2025-11-25T16:02:37","modified_gmt":"2025-11-25T16:02:37","slug":"cut-the-cost-pay-the-price-the-hidden-risk-of-unproven-ai-solutions","status":"publish","type":"post","link":"https:\/\/www.trintech.com\/blog\/cut-the-cost-pay-the-price-the-hidden-risk-of-unproven-ai-solutions\/","title":{"rendered":"Cut the Cost, Pay the Price? The Hidden Risk of Unproven AI Solutions"},"content":{"rendered":"
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Cut the Cost, Pay the Price? The Hidden Risk of Unproven AI Solutions<\/h1>\n

Blog post<\/p>\n <\/div>\n

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CFOs everywhere are getting the same memo: cut spend<\/em>. The current need for budget cuts has led to a rise of alternative and sometimes DIY solutions \u2013 maybe leveraging a system like ChatGPT, a build-it\u2011yourself project, or a generative AI startup that \u201cdoes it all.\u201d On paper, the price tag looks smaller. In practice, the risk and real costs can be much larger.<\/p>\n\n\n\n

When it comes to startups, one thing is widely known: many fail. Reported statistics vary widely\u2014from a questionable 90% failure rate to a more reliable, yet still concerning, 50% failure rate within the first five years, according to the Bureau of Labor Statistics. The technology space accounts for over 25% of all startups<\/a>\u2014with fintech accounting for 7.1% alone\u2014there\u2019s a high risk of technology whiplash: investing time and money in a tool that\u2019s here today, gone tomorrow.  <\/p>\n\n\n\n

Far beyond the inconvenience of losing a tool you invested time and money in implementing is the impact flighty or unproven financial close tools can have on your business and reputation.<\/p>\n\n\n\n

The real price of getting the close wrong<\/h2>\n\n\n\n

When it comes to the close, the \u201ccheaper\u201d path isn\u2019t actually cheap if it pushes you closer to control failures or extended audits. Unfortunately, audit fees continue to climb to record highs. The average audit fee for SEC registrants was a record-high\u00a0$3.26 million in 2024<\/a>, a 9% increase from the previous year.\u00a0This no doubt reflects the increased complexity it now takes for something like an ICFR (Internal Control Over Financial Reporting) audit to evaluate all the processes and procedures a company has in place that ensure accuracy and reliability of financial reporting.\u00a0<\/p>\n\n\n\n

With expanding global organizations, it\u2019s more complicated \u2013 and critical \u2013 than ever before to know exactly where your data is coming from and how secure it is. Do you have complete oversight and confidence in your numbers when preparing financial statements? What controls are in place to prevent fraud? What procedures are you documenting to ensure your reporting is free from material misstatement?<\/p>\n\n\n\n

Remediating material weaknesses are some of the highest costs to remediate. One source indicates that\u00a0companies spend an average of $7.8 million to eliminate each material weakness<\/a>, including remediation efforts, increased audit fees, and other associated expenses.<\/p>\n\n\n\n

Hidden costs you\u2019ll carry with unproven AI<\/h2>\n\n\n\n

If you\u2019re evaluating a custom solution or a tool from a startup, make sure to factor in:<\/p>\n\n\n\n